Effective distribution of an innovativeproduct epitomizes a challenge faced by many companies in the informationtechnology industry. Chief marketing officers around the globe are constantlyin search for the most successful way in which to market a product. In theearly phases of the IT industry, conventional strategies were adopted wherebythe entire good or service had an associated price. Nevertheless, the IT marketlandscape has undergone a myriad of changes particularly in the past couple ofdecades.
Money invested into the information technology industry continues toincrease. The market rose from US $2,081.9 billion in 2014 to $2,199.3 billion in2015 with the Interactive Data Corporation (IDC) predicting that it will peakat $2,461.1 billion by 2019. As a result of this, the Internet penetration rateand user count has grown overwhelmingly and several companies have introducedonline software distribution models, for example online marketplaces such asMicrosoft online store and Apple App Store. Akin to this, Freemium, a new softwarebusiness model has surfaced.
It is a culmination of the “free” and “premium”services available for a particular product. In summary, this model, for free,gives away a specific level of consumption whilst profiting from theconsumption of the premium level.Freemium can be most commonly found in twomodels which are feature-limited freemiums (FLF) and time-limited freemiums(TLF).